In reply, I have to say that the ruling of this office on this subject is as follows: When real property is conveyed subject to a mortgage, if the deed conveying the same contains any covenant or statement that the grantee assumes the mortgage and becomes liable thereby for a deficiency judgment in case of foreclosure, then the amount of the mortgage is to be added to the value of the equity of redemption in determining the consideration on which the stamp tax is to be based. However, if there is no covenant or statement in the deed whereby any liability of the grantee for the payment of the mortgage can be implied, then the consideration is to be based only on the value of the equity of redemption. Please inform the honorable recorder of deeds that the ruling contained in Treasury decision 19932,1 in reference to real estate conveyed subject to a mortgage, has been modified as above stated. Respectfully, yours, Mr. E. H. BONSALL, ROBT. WILLIAMS, Jr., Acting Commissioner. Second Vice-President Lana, Title and Trust Company, Philadelphia, Pa. (21621.) Stamp tax-Conveyances of real property. Taxation of conveyances of real property where a mortgage is given to the grantor by the grantee at the time of conveyance for part of the purchase price. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., September 22, 1899. SIR: I have to acknowledge the receipt of your letter of September 20, 1899, inclosing a letter from Mr. Howard Thayer Kingsbury, of 20 Nassau street, New York City, in regard to the conveyance of real property where a mortgage is given to the grantor by the grantee at the time of conveyance for part of the purchase price. You are advised that the former published rulings of this office, relative to real property conveyed subject to a mortgage, have no reference to cases where the grantee is the original mortgagor. In a deed of this kind the taxable consideration will always include the amount of the mortgage, as well as the part of the purchase price paid in cash, and the deed must be stamped accordingly. The mortgage given as part of the purchase price is taxable in itself the same as any other mortgage, subject to the amendment of February 28, 1899. If the amount of tax accruing on the mortgage is greater than that accruing on the note secured thereby, the amount of stamp tax re 'Compilation of Decisions Rendered by the Commissioner of Internal Revenue under the War-Revenue Act of June 13, 1898 (January, 1899), page 231. quired is to be computed according to the amount of tax due on the mortgage only, and the stamp may be applied to either instrument as parties may elect. Respectfully, yours, G. W. WILSON, Commissioner. Mr. CHAS. H. TREAT, Collector Internal Revenue, New York, N. Y. (21667.) Stamp tax-Conveyance in nature of mortgage and "bond to reconvey" used in the State of Georgia. The conveyance used under the statutes of the State of Georgia in cases where the payment of a debt is secured by pledging of real estate is taxable under the paragraph in Schedule A relating to mortgage or pledge.-The "bond to reconvey" is subject to a tax of 50 cents. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., October 14, 1899. SIR: This office is in receipt of a letter, under date of the 3d instant, from Messrs. Gignilliat & Stubbs, attorneys at law, Savannah, Ga., in which these gentlemen inclose a form of instrument used in the State of Georgia by conveyancers in cases where the owner of real estate places an incumbrance upon the same by way of an equivalent to a mortgage. It appears that under the statutes of the State of Georgia the owner of real estate conveys the same direct to the lender of the money, or the party to whom the debt is due, in fee simple, and the party to whom the real estate is conveyed gives a bond to reconvey the same when the debt is paid. While the first instrument herein referred to is a conveyance, it is not such an instrument as is taxable under the paragraph in Schedule A relating to conveyances. The document creates the relationship of mortgagor and mortgagee, and is in effect a mortgage and is taxable under that paragraph in Schedule A relating to mortgages or pledges, and when the indebtedness does not exceed $1,000 this document is not subject to taxation; when it exceeds $1,000 and does not exceed $1,500, he tax accruing is 25 cents; for each additional $500 or fractional part thereof in excess of $1,500, 25 cents. If the indebtedness is represented by a note secured by this instrument, the instruments being executed subsequent to the passage of the amendment to Schedule A, approved February 28, 1899, only one tax accrues, and it is the greater one found to accrue respectively on the instruments executed. The amendment is as follows: Whenever any bond or note shall be secured by a mortgage, or deed of trust, but one stamp shall be required to be placed upon such papers: Provided, That the stamp tax placed thereon shall be the highest rate required for said instruments, or either of them. It is not to The "bond to reconvey" given by the grantee or lender to the grantor or borrower is subject to taxation at the rate of 50 cents. be considered under the above amendment. Respectfully, yours, ROBT. WILLIAMS, Jr., Acting Commissioner. Mr. H. L. RUCKER, Collector Internal Revenue, Atlanta, Ga. (21780.) Stamp tax-Transfers of mortgages. Statute relative to taxability of transfers of mortgages construed. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, SIR: I have to acknowledge the receipt of your letter of the 11th instant, inclosing letter of Messrs. Pratt, Dana & Black, of your city, asking a ruling relative to the transfer or assignment of mortgages under Schedule A of the act of June 13, 1898. Letters have also been received on the same subject from several other parties in your city, viz: J. D. Robertson, president Interstate National Bank; Garland M. Jones, attorney; Chicago Live Stock Commission Company; J. G. Strean, cashier National Bank of Commerce; R. F. Porter, attorney, and Harwood & Meredith, attorneys. These letters have presumably all been caused by a recent ruling of Judge Woolson, of the United States district court at Keokuk, Iowa, with respect to the transfers or assignments of mortgages, where the assignment or transfer is not express, but only by implication or operation of law. It appears that this ruling was not a written one, but made verbally on a question of the admissibility of evidence. This office has received, through the clerk of the court, what seems to be an authentic statement of the position of Judge Woolson in this matter. The facts are not stated in much detail, but sufficient appears to show that one Gillett, in Kansas, gave his promissory note for a sum of money secured by chattel mortgage on some cattle. This note passed by various indorsements to the Bank of Orion, an Illinois corporation, and the plaintiff in this case, the last indorsement being in blank. According to the law in most, if not all, the States, the assignment of a debt secured by a mortgage carries with it the security. The mortgage and note in this case were apparently duly stamped when originally executed; but Schedule A provides that upon each and every assignment or transfer of a mortgage a stamp duty shall be required and paid at the same rate as that imposed on the original instrument. It appears that this mortgage had not been stamped as an implied transfer, and when the said plaintiff, wishing to avail itself of its security, offered the same in evidence, it was objected to, and ruled out by Judge Woolson as incompetent, because it had not been stamped for the transfer. The crucial part of the judge's opinion is contained in the following language, which appears in the statement before alluded to: Here are two contracts entirely separate. One, the note, contracts to pay a sum or debt. Now, that is a good contract if no mortgage secures it. The other contract is the mortgage, contracting or pledging that certain property shall stand good for the other contract or note. I may transfer the note and not the mortgage, if such is my express contract with my assignee. If I transfer merely the note or debt contract, no restamping is necessary, according to the law. My transfer, then, merely gives the ownership of the debt and the right to enforce it to my assignee. The chattel mortgage in this case is a Kansas contract; it was executed there, and it provides for being enforced there. The Kansas statute declares that the owner of a chattel mortgage is the holder of the legal title and right to possession of the property mortgaged. That means here that before the assignment or transfer of the chattel mortgage to the Bank of Orion, which now holds it, the Kansas persons then owning were "the holders of the legal title to the cattle mortgaged." When these Kansas people transferred to the Bank of Orion the note, they transferred (although by operation of law) the chattel mortgage. That transfer thus made the Bank of Orion the holder of the legal title to the cattle mortgaged. Instead of such legal title remaining with these Kansas people or assignees, it passed to the Bank of Orion; and every time this chattel mortgage is assigned or transferred there is thereby passed to the assignee the legal title, which theretofore the assignor had held, to the cattle mortgaged. Under this statement it would appear that such transfer of legal title ought to bear revenue stamps accordingly. If such is not the law, a manifest oversight has occurred. I am not able to concur in the opinion of Judge Woolson, and some of the reasons for my dissent are stated below: It is to be presumed that Congress made its laws with reference to the business of the country, and did not intend to make enactments impossible of execution. To tax the implied transfer of chattel mortgages, where it has become the practice to go into the open market and sell the notes secured thereby, would render it necessary to tax each and every transfer. Suppose the mortgage should secure a half dozen notes, and each note should be indorsed by the original holder to a separate party, and each indorsee, disposing of his interest, should again indorse it over to another until each note should pass through the hands of six different holders, would it not be very difficult, if not impossible, to collect tax from thirty-six different transferers of the same instrument, and how is the $1,000 exempt from tax to be apportioned among all the transferers? Again, take the instance of the bonds issued by corporations in this country, vast in number and vast in amount. All of these bonds are secured by mortgages or deeds of trust. There is no doubt that each transfer of bonds carries with it the security pledged therefor. Then, according to Judge Woolson's doctrine, in a case where a man buys one thousand dollars' worth of bonds secured by mortgage, the mortgage is transferred to him pro tanto, and a tax accrues as a transfer therefor. Is such a construction of the law possible of execution? To state the question is to answer it. All laws must be reasonably construed. I therefore rule that Congress intended only to tax the express assignments and transfers of mortgages, and not those that were merely implied or by operation of law, and that the transfer or assignment of a mortgage to be liable to stamp tax under the terms of Schedule A, act of June 13, 1898, must be made in writing and signed by the assignor. Please inform the gentlemen above named of the terms of this ruling. NEGOTIABLE INSTRUMENTS. (See CHECKS, DRAFTS, NOTES, ETC.) PAWNBROKERS. (20552.) Special tax-Pawnbroker. Special tax of pawnbrol er not required to be paid for making loans when the chattels are not taken or received by way of pledge, pawn, or exchange. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 17, 1899. SIR: Your letter of the 12th instant is received relative to the business conducted by George McElwain, Kuhn's Building, Dayton, Ohio. I note the statements made by you that Revenue Agent Haynes reported to this office Mr. McElwain for special tax as pawnbroker from November 1, 1898, with penalty of $20; also that, in your opinion, he is not a pawnbroker. You ask for a ruling in this case at an early date. In reply, you are advised that, from the statements made by Mr. McElwain in his letter addressed to you on the 10th instant, which you inclose, I am of the opinion that he is not subject to special tax as a pawnbroker. The making of loans on chattels would not subject him to said special tax unless he should "take or receive, by way of |